Department store operator Belk has announced that it completed a deleveraging transaction with its first- and second-lien lenders and equity sponsor Sycamore Partners. This move has reduced the company’s outstanding debt by more than $950 million, amended its existing asset-based credit facility to extend the maturity date to July 2029 and secured approximately $485 million in new capital.
The new capital includes $275 million of secured term loans and a $210 million securitization facility secured by revenue streams from the company’s loyalty credit card program.
The transaction results from Sycamore’s work with the storerunner’s lenders to significantly deleverage Belk’s capital structure and provide the business with additional liquidity to expand national vendor partnerships. The transaction strengthens Belk’s financial position, the company added, and further enhances its ability to deliver for its customers and partners.
In reviewing the transaction, Pulse Ratings noted that the completion of the deleveraging transaction is a positive development for Belk, one that should improve its net leverage and significantly reduce annual interest obligations.
Belk CEO Don Hendricks said in reporting the transaction: “Today’s announcement marks a pivotal milestone for Belk as we move into the future with a capital structure that positions our business for sustainable, long-term growth and profitability. We are confident that our stronger balance sheet will enable us to build on the momentum and growth we’ve seen in recent quarters, better serve our customers and their communities and be an even stronger partner to our vendors.”
Belk, a privately owned department store retailer, operates close to 300 stores across the southeastern United States.
